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Notes POB 2

The document discusses the key functional areas and organizational structures of businesses. It outlines four main functional areas that are common to most organizations: production, finance/accounts, marketing, and human resources. It also describes the main functions of management as planning, organizing, directing, delegating, controlling, coordinating, and motivating. Finally, it analyzes different types of organizational charts including line, functional, line and staff, and committee structures.

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Meech Dre
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41 views

Notes POB 2

The document discusses the key functional areas and organizational structures of businesses. It outlines four main functional areas that are common to most organizations: production, finance/accounts, marketing, and human resources. It also describes the main functions of management as planning, organizing, directing, delegating, controlling, coordinating, and motivating. Finally, it analyzes different types of organizational charts including line, functional, line and staff, and committee structures.

Uploaded by

Meech Dre
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Functional Areas of Business

Departments in a business organization are structured according to certain functions.  The


departments of various organizations will differ depending on the type of business. Below are
four main functions that tend to be general to most organizations.

Production

The production department is responsible for transforming raw materials into finished
products. They are also responsible for quality control to ensure that required standards are
met.

Finance/Accounts

The accounts department makes and receives all payments on behalf of the business and
records all financial transactions

Marketing

This department creates awareness for the firm products and motivates consumers to buy.
They also carry out market research to identify customer’s needs

Human Resources/Personnel

The human resource department recruits and selects staff for the business organization.  
They are also responsible for staff training and welfare.

Functions of Management

Planning  

All managers must plan, that is, setting out steps for the attainment of future organizational
objectives.  It involves formulating the policies and programmes for the firm.

Organizing 

Organization reduces cost, time, chaos and conflicts.  Managers must obtain all the necessary
tools, machinery and personnel for each task and arrange all tasks so that they are done in the
most efficient manner.

Directing 

Managers must guide subordinates by giving them instructions to perform the tasks assigned.

 
Delegating 

Delegating duties involves giving others (e.g. supervisors) the authority to have specific tasks
completed through the management of others. Therefore, supervisors will ensure that workers
complete tasks assigned. Delegation reduces the workload of the manager.

Controlling

Managers must continually measure the activities of subordinates, ensuring that all activities
conform to plan.

Coordinating

Managers must bring together all the various organizational tasks so that the organization
may function harmoniously.

Motivating

Managers must inspire workers to perform their tasks well.

Responsibilities of Management

Management must be aware of their responsibilities to the various groups that they interact
with for the successful running of the business.

1. To the owners of the business (this also includes shareholders)

Managers are expected to ensure efficiency in all areas of the business.

2. To employees – Managers must pay adequate wages and provide good working conditions.

3. To customers – Managers must ensure that products are of good quality and are reasonably
priced.

4. To the society – Managers must find ways to reduce harmful air pollution and the
discharge     of harmful waste created by the production process into rivers and seas
5. To the government – Management should adhere to various government legislation and
regulations.

Organizational Charts

An organizational chart is a diagram of the organization of an enterprise. Its pyramid shape


illustrates the hierarchy system that exists in the organization. The most senior position in the
organization is placed by itself at the apex. The pyramid gets wider towards the bottom
depicting the greater number of workers at its base.

Those who have the power to issue commands have authority in an organization. In the
organization chart above the sales manager has authority in the Sales department.  All people
with the same level of authority are placed at the same level on the chart. For example the
sales manager and the accounts manager have the same level of authority in their various
departments.

Responsibility is the capacity to accept duties and to carry out their tasks. Both sales
supervisors are responsible to the sales manager.

The chart shows the following:

-each person’s position

-the number of levels of managers

-to whom each employee is responsible (reports) to

-the span of or (area) of control for senior staff members.

Types of Organizational Charts

Line or Direct
The line organizational chart depicts a straight line of command. Authority is said to flow
downwards only in the line organization. The line organizational structure is found in schools
or in the military.

Functional Organizational Chart

The Functional organization chart is a diagram of an organization that is arranged by its


functions. For example, there is a manager in charge of marketing, and another in charge of
production.  This type of organization has an advantage over Line as experts are appointed to
run each department. All managers’ report to the General Manager.
The Functional organizational chart combines the straight line of command of the line
organization with horizontal dotted diagonal lines representing functional authority. The
dotted diagonal lines in the figure above show the authority that the Human Resource
Manager has over other departments. The Human Resource Manager is allowed authority in
these department over human resource matters only e.g., to hire and fire workers. He
therefore cannot give directives on production or marketing matters.

Line and Staff Organizational Chart

The Line and Staff organizational chart combines the line and functional organization with
the addition of staff personnel. Staff workers assist and advise line workers. Staff workers
include consultants, advisors, company lawyers, executive secretary, auxiliary workers etc.
Staff officers do not have authority, that is, the power to delegate tasks to subordinates in the
organization. Their main role is to advise and assist line officers. This is why there are no
vertical lines connecting staff officers to any other member of staff on the chart. They are
therefore placed at the side directly below the line officer whom they assist or advise.

Committee Organizational Chart

Committees are advisory bodies. They are usually appointed to advise organizations.  
Examples of committees include parent teachers’ associations and student councils which are
committees within a school organization. Committees usually delegate certain duties to sub-
committees. For example, an executive committee may appoint a finance committee to advise
it on financial matters. Note that an element of the line organization exists in the committee
organization as all sub-committees are responsible to the executive committee.

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